How to Budget for a Big Expense When Your Monthly Take-Home Pay Isn't Enough

You can enjoy your money without the guilt—as long as you properly plan your expenses.IMAGE iStock

Even if you're comfortable with your current suweldo, there are probably purchases you want to make that seem to go beyond your monthly take-home pay: It could be a necessity, such as a home upgrade, or a luxury purchase, like that designer bag you’ve always wanted. The point is, you shouldn’t feel worried or even guilty about what you want to spend your hard-earned money on, as long as you plan for it.

Note that this focuses on expenses that can wait, which means emergency shell-outs are not included (insurance policies can help during such occasions). If you have the luxury of time to build your monies, here are a few things you can do to avoid extreme belt-tightening:

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If you’re paying in cash:

Take a look at your budget.

When your suweldo arrives, review your priorities and have a budget for them. On the top of the list should be your savings and your emergency fund (you should never skip on these because you should always pay yourself first), followed by rent, utilities, food, transportation, credit card bills, loans, and the like. Then take a look at what’s left—this is what you can spare for your planned purchase. From here, you can more or less gauge how much you can set aside and for how long you’ll be doing so.

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Have a target date of purchase.

And stick to it! This means that you have to be consistent with budgeting for your upcoming expense. If you get an unexpected windfall, you can also direct it to your fund so that you can go through with the purchase sooner.

Be patient.

Remember, this is a purchase that can wait, or at the very least, can be delayed for a few months. Don’t jump the gun by touching your emergency fund just because you already want to get things over with. The process of saving up may be slow, but just treat it as you would any habit—do it, then forget about it. Think of it as delayed gratification. After all, if you planned it right, it won’t hurt your pockets as much. Only touch your emergency fund when an expense can’t wait, and make sure to refill the pot soon after.

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If you’re using your credit card:

Swipe with a plan

Using your card immediately gives you the product or the service that you want, but before you pick this option, first have a plan on how you can pay for what you swiped. Your best bet is to get it at zero percent interest for six, 12, or 24 months, and check if you can pay for the monthly fees without feeling pinched.

There are also banks that offer buy-now-pay-later schemes which give you ample lead time to collect your funds.

If there are no viable payment plans available, save up for the purchase instead and buy it with cash later on, since if you’re swiping and going for a straight payment, you’ll need to settle your bill in full the following month. Failure to do so means you’ll have to shell out for interest on top of your actual expense, which is exactly how people start getting buried in credit card debt.

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The bottom line: be smart

The key to enjoying your suweldo is knowing your priorities and spending responsibly. As long as you have a plan, you’ll manage to find ways to extend your money, save and grow a part of it, and even get you something that you like sans the guilt.